Egg cracks down on bad customers

[Mistermind]

The Egg was sold by the Prudential to the Citi group in late 2006 or early 2007. Not surprising if their new owners want to review their account profitabilities.

 

The timing of this move is interesting, not sure if it would be followed by similar moves by other cards. It could be that Egg is now expecting a legal ruling soon putting a binding cap on their penalty charges, thus making it no longer worth their while to service high-risk accounts, which until recently earned their keep because of the exhorbitant revenue they brought to Egg through £20 then £16 penalties.

 

This timing also comes in the wake of the US sub-prime lending debacle. It is not only Northern Rock which now finds it hard to borrow on the open market, for sure credit card institutions as well. Possibly Egg's review of accounts has highlighted the unprofitability of servicing both the poorest and the richest cardholders.

 

If such account trimming does spread industry wide, I wonder if this signals the end at last of the UK credit card explosion offering indiscriminate lending, made profitable in no small measure by exhorbitant penalty charges from those who fall foul of their unlawful T&C.

[Mistermind]

If Egg are braced to face a well publicized storm over their 160,000 card closures they are likely to want to keep their other controversies quiet -- one possible reason for the two full reclaims reported last week as settled in record time after one letter to Egg with no argument, taking surprisingly three weeks and one week respectively.

 

If so, let other claimants be aware of this window, open for now.

[Mistermind]

And Channel4 report

 

http://www.channel4.com/news/articles/business_mon...

[Mistermind]

BBC NEWS | Business | Egg customer anger at credit move

 

 

Finance, Investments n Trading: Egg Card Withdrawal – Cardholders angry at Egg card’s decision

 

 

Have you had your Egg card cancelled? If so, have you ever missed ...

 

"VOTE NOW

Have you had your Egg card cancelled? If so, have you ever missed any payments?

 

The results:

 

Yes - 70%

No - 30%

 

Thank you for voting. Total votes 401"

 

 

Read the report: Egg withdrawal will 'benefit' borrowers

 

Have your say: Tricks from Egg, and more on why they are cancelling 160,000 credit cards

 

The original story: Egg to block 160,000 credit cards

[Mistermind]

 

Can I get the interest frozen?

 

many thanks

 

Wendy

 

Egg interest compounded monthly is at a higher rate than bank loans. Cardholders consented to accept Egg's debit interest agreement as part of a package including privileges of charging purchases to plastic with a certain number of days interest free, cash advances, insurance on purchases etc.

 

If the card company unilaterally decided, without misbehaviour on the part of cardholders, to withdraw privileges which were part and parcel of the original package accepted as a whole by the cardholder, then by the principle of reciprocity the cardholder ought to be allowed to withdraw his previous consent to pay high credit card interest rates now that he is denied the privileges of using a credit card -- privileges itemised in the original signed agreement.

 

I.E. if the card company decides to withdraw privileges, they ought to reduce the interest rate which was part of the bargain.

[Mistermind]

Reclaim by a bank customer for contractual interest accrued on unlawful penalty charges was dismissed in one High Court case last year. The judge would not allow the principle of mutuality and reciprocity to apply to the case, when there was no clause in the signed contract explicitly saying in layman's terms:

 

"If the customer owes the bank then the bank charges the customer X % compound interest per month as agreed. But if the bank made a mistake and overcharged the customer then the bank owes the customer the same rate of interest acruing on the mistaken overcharging for the duration of the mistake."

 

In the case of Egg Card, probably best to pore over the agreement to look for evidence of coupling between interest terms acceptance by cardholder and service provided by Egg. If there is an explicit or implicit condition, then when said service is withdrawn the continuing high interest rate would be without foundation. My Egg Card was closed long ago, perhaps someone with live documentation could check the wording, and the wording in Egg brochures.

[Mistermind]

have had a good look through Egg Card credit agreement and I cant see anything

 

20. Ending this Agreement

 

20.1 If you are not happy about your choice of Account, let us know within 14 days of sending your completed Agreement back to us and we will cancel your Agreement. If you want to cancel your Agreement then you should call us on 08451 233 233. You can also write to Egg Account Servicing, Point North, Waterfront West, Dudley, DY5 1LU, or you can send us a secure email from our website. You should quote your Card number in all correspondence. If you cancel your Agreement, you must repay what we have lent you, and pay all interest and charges applying before cancellation, taking into account any amounts you have already paid to us, within 30 days of cancellation and must cut in more than two pieces and throw away all the Cards we gave to you or an Additional Cardholder. If you do not cancel your Agreement, your Account will remain open until your Agreement is ended in accordance with this Condition 20. You may have extended cancellation rights in certain circumstances. If you do cancel your Agreement, and you exercise those rights, you will still have to pay everything you owe us for the period up to cancellation, including interest and charges.

 

20.2 We can end this Agreement at any time. We will normally give you 30 days' advance notice by post or email. However, if there are exceptional circumstances, or in any of the circumstances referred to in Condition 19.2, we may end this Agreement immediately and tell you about it afterwards, unless we are required by law to give you notice first. You can end it at any time by telling us to do so by post or email. In both cases, this Agreement will continue until you have repaid all amounts you owe us.

 

20.3 We can end this Agreement early by giving you notice in writing if you seriously or repeatedly fail to meet your obligations under any other agreement you have with us and as a result:

• we give you notice ending that agreement; and
  
• we reasonably believe that you will fail to meet your obligations under this Agreement in a serious way.

This Agreement will continue until you have repaid all amounts you owe us.

 

20.4 Any benefit or services we provide will end when you give us notice or when our notice is effective unless the terms of the particular benefit or service state otherwise.

 

-----------------------------------------------------------------------

"20.2 We can end this Agreement at any time."

"20.3 We can end this Agreement early by giving you notice in writing if you seriously or repeatedly fail to meet your obligations under any other agreement you have with us and as a result..... "

 

These two Egg clauses appear to be contradictory, one says end of agreement is unconditional, the other says it is conditional on misbehaviour on any agreement within the Egg group of companies. The end of 20.3 further compounds the confusion by saying: "this Agreement will continue until you have repaid all amounts you owe us." -- i.e. the agreement is both ended and continuing.

 

The only reference to interest accrual (the absence of same) after termination appears to be clause 20.1 referring to the obligation upon card cancellation within 14 days of Egg Card take-up:

 

"and pay all interest and charges applying before cancellation, ........within 30 days of cancellation ........................... If you do cancel your Agreement, and you exercise those rights, you will still have to pay everything you owe us for the period up to cancellation, including interest and charges."

 

If this clause could be adduced for cancellations and terminations in general, then interest non-accrual post termination might be justified. If this condition by analogy cannot be upheld in court, there would still be the argument on grounds of equity and reciprocity, i.e. regardless of whether the agreement is terminated, the financial service is terminated.

 

That if a restaurant ceases to serve meals, it can hardly present a stiff bill charging for the absence of service. No doubt the forum's legal experts would offer an informed opinion.

 

Good luck to all affected.

[Mistermind]

I noticed online that my application form is just an electronic ticked box - didnt I read somewhere though that these are acceptable?

 

Below is an account of how an entire PPI reclaim case verdict in court turned on the contents of a tickbox as evidenced by Egg's screen print:

 

16 weeks - 19 JUN 2007 - won PPI in court - Empire strikes back v Egg Card Repayment Insurance.

[Mistermind]

Hi everyone I have contacted egg for a copy of my and my wifes CCA and this is what they have said.

 

In relation to your credit agreement, as Egg is an internet based credit card this information can viewed online. I'll be unable to arrange for a copy to be sent to you. Simply select 'Small Print', under the Egg Card option on our website.

 

can anyone offer any advice please?

 

thanks

 

Bob,

 

I cannot recall reading any postings where defective Egg CCA resulted in a legally unenforceable debt.

 

Search, Advanced Search, keyword CCA searching thread title only, limiting to Other Institutions -> Egg Forum, produced the following 5 threads which you might like to read through for background. There would be about 60 threads if you searched for CCA within threads contents.

 

The storm Egg unleashed by closing 161,000 accounts has led to an explosion of postings, but alas in many different website forums as listed in a previous post here, and even within CAG informative postings on this subject are spread beyond this Egg Forum unbeknown to readers, unless they do Advanced Search by keywords.

 

This leads to duplication of effort and research. If the victims value co-operation and pooling of info or joint action sharing costs, perhaps they need a central point of contact to cross-inform and co-ordinate activities now mushrooming in many different websites with the same independence and speed as fungi after rain.

 

I am not that co-ordinating person as my Egg Card was closed ages ago. Might be something to consider for the 161,000 -- many of them high achieving good customers summarily thrown out.

 

CCA'd Egg - sent Advantage CCA not current card CCA...

europa16 - 20th October 2007

CCA arrived after 62 days! - lisa2393 - 4th June 2007

Dca Sent Cca - Do I Have To Deal With Them? - Hopeful1 - 25th May 2007

capquest/Egg CCA failure to comply - jssandy01 - 7th March 2007

Egg CCA Help! - bongobaz - 12th July 2006 13:04

[Mistermind]

Well done Mrs P.

 

To clarify, you have claimed back PPI and Egg have now refunded all you claimed? And the main arguments supporting your reclaim?

[Mistermind]

Well done Mrs P. Yours would be only the fourth reported case of successful Egg PPI reclaim, you join the V-E Day Parade again as the distinguished winner number 84, and the beacon you lit will give others encouragement from all points of the compass.

 

As for CCA request, did you ever request S.A.R - (Subject Access Request), and was the copy agreement among the 1-inch-high pile of papers delivered to you? If not, it can do no harm to request same for £1. Debt collectors show no mercy, but they stand to learn that the sword of the law cuts both ways.

[Mistermind]

moved to a different thread.